While the recent TAI User Group featured many highlights, one session in particular that stood out was the reinsurers panel discussing the impacts of COVID-19 on the life insurance industry. Moderated by Chris Murumets, the esteemed group of panelists included Al Mele from SCOR, Marc-Andre Simard from Canada Life Reinsurance, and Mike Taht from Munich Re. They shared valuable insights on how we as an industry adapted our business and responded to the COVID-19 pandemic. I couldn’t help but take another look and summarize what we heard (thanks to all of the panelists for allowing us to do so).
The Life Insurance Industry Proves Resilient
The discussion started with a question about what they were most proud of over the past year. I expected stories of how hard their teams worked and the lengths they went to keep servicing their customers. In addition to this, though, we also heard a unanimous vote of confidence in the insurance/reinsurance industry. Despite the tremendous strains placed on both health and life insurers the industry showed a nimbleness and an ability to adapt under pressure – something, we can all be proud of.
Best Practices as a Result of Adapting to the Pandemic
The insurance industry moved quickly to adapt to the pandemic. During the session, the panelists reflected on best practices that came from these changes that are likely to stick around. This spanned from exploring alternative sources of data and documentation to ensure that underwriting and claims proof could continue in a contactless environment; to a realization of the value of organizational agility; and tighter relationships among underwriting, actuarial, and medical professionals. The underlying theme during this portion of the conversation was the true collaboration and partnership that occurred in the industry to adapt to these changes together.
Lessons Learned from Working Remotely
Like all industries, we increased the number of employees working from home. This caused some growing pains for carriers that weren’t ready to support a fully remote workforce, but for the most part, they adapted. Many of the carriers I work with say they’ve discovered an upside of allowing employees to work from anywhere. They anticipate being more flexible moving forward.
For our panelists, the ability to hire remote workers gave them access to a broader talent pool. During the pandemic, the work-from-home setting proved that good people don’t necessarily need to be in the office to be productive, so our panelists found they were able to hire great talent irrespective of where they call home.
That said, remote work also gave us an appreciation for the way office environments are conducive to things like whiteboarding with colleagues or spontaneous water cooler conversations. It’s just not the same over Zoom. The panel agreed that the optimized workplace of the future would include a combination of working arrangements. It was even suggested that we might think of the office of the future not as a place that workers must go to every day, but as a tool to be used when needed.
Access to Data Remains a Challenge for Life Insurers
Life insurers are in the business of analyzing data to evaluate risk. COVID-19, being a novel virus, presented some unique challenges. Early on, we could already see that it did not act exactly like other viruses. There were so many unknowns that needed to be studied: symptoms, comorbidities, transmissibility, mortality rates across different age groups, etc.
Furthermore, collecting the data was not an exact science. With everything moving so quickly, we had no time to standardize the parameters. For example, what constitutes a COVID-19 death? Individual countries used their own definitions. Even hospitals and health departments within regions couldn’t seem to agree. Definitions also changed over time, so comparing COVID-19 death rates this month to those six months ago could be like comparing apples and oranges.
The 2020/2021 Data Anomaly
Given the challenges mentioned above and the overall uniqueness of the pandemic, another element of data discussed during the panel was around what to do with insurance data from 2020 and 2021. How can it be used to understand the long-term impact of COVID-19 or the short-, medium- and long-term view of mortality rates? While a unique dataset, the panelists agreed that there is a lot to be learned from this time, and truly understanding the impact will be a continued discussion for the foreseeable future. The panel expressed openness towards the reinsurance and direct writer community coming together to collectively discuss learnings. By combining broader datasets, we can create the best possible view.
COVID-19 has had a heartbreaking toll on the millions of families who have lost a loved one or suffered from its physical, mental, emotional, or financial effects. Throughout this entire pandemic, the insurance industry has responded to the challenge and provided financial resilience in a time of great fear and uncertainty. Looking to the future, I hope that we can take the lessons learned, while they’re still fresh in our minds, and develop new strategies for working together as an industry.